Thursday, May 31, 2007

Even More Disruption

Another story illustrating how easy it is to engage in disruption activities. Right now, this is just another "accident" that is limited in its effects.

Faulty fax, mistaken as threat, prompts evacuation of stores
By John C. Drake, Globe Staff

ASHLAND -- In a scene reminiscent of the Cartoon Network bomb scare that paralyzed the Boston area in January, police shut down a strip mall yesterday in this small western suburb after employees at a Bank of America branch mistook a botched fax for a bomb threat.

Frustrated shop owners said the branch overreacted to the strange fax, which turned out to be an in-house marketing document sent by the bank's corporate office.

"The women at the bank should have handled it a little better," said Nick Markos, owner of Townhouse Pizza and Roast Beef, who estimated that he had lost $1,000 to $1,200 because of the lunch-hour evacuation. "She blew it all out of proportion, and all of us business owners had to pay for it."


Remember, in Panic Culture, stupidity always wins.

Eventually 4GW outfits will incorporate this in to their Standard Operating Procedures, throwing in enough real attacks to keep everyone off balance. Expect even more overreactions like this if social mood, and thus the economy, enters a downtrend.

And, just curious, what is it about Boston and this sort of thing? First there was the Cartoon Network "bomb" scare, now this. Is the Boston Globe and local TV especially aggressive in promoting Panic Culture?

Wednesday, May 30, 2007

Remain Calm, All Is Well (Part Fourteen)

Wow.
Taxpayers on the hook for $59 trillion
by Dennis Cauchon, USA Today
...Bottom line: Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. By comparison, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined...

My normal sarcasm fails at this point. All this talk here at FutureJacked about 4GW, plunging "social mood," economic collapse, Peak Oil, etc. is just that for most of us in the U.S. right now - talk.

It also points out a part of socionomic theory usually not mentioned - that when people are still confident as a group, even the most obvious and glaring problems can be ignored. The kind of delusional confidence this requires is as deadly as any plague that ever swept through a population.

Once this delusional confidence collapses, numbers like those point to a Day of Reckoning so vast and deep as to be unimaginable.

Please, if you have not already done so, get your fiscal house in the best shape you can and prepare your family for some very rough times ahead.

More High ROD Activity

It is interesting to watch how the tactics used by global guerrillas in the laboratory of Iraq spread so rapidly.

Kidnapping is nothing new in Iraq, but this focus on Westerners (the U.S. soldiers a few weeks ago, and now the recent kidnappings of British contractors) is almost certainly having a serious impact on combat operations and pacification efforts. How many soldiers are out chasing kidnap victims instead of "surging" their way around Baghdad? A few Iraqis dressed up in police uniforms run a quick op and now have hundreds, if not thousands, of western troops and intel experts focused on a kidnap operation instead of whatever else the generals would want them to be doing. That's definitely a high Return on Disruption activity.

Shi'ite militia may have kidnapped Britons in Iraq
By Mariam Karouny and Ahmed Rasheed, Reuters

BAGHDAD (Reuters) - Iraq's foreign minister said on Wednesday he suspected Shi'ite cleric Moqtada al-Sadr's Mehdi Army militia was behind the abduction of five Britons from a government building in Baghdad.

U.S. and Iraqi troops raided Baghdad neighborhoods overnight, including the Mehdi Army stronghold of Sadr City, in a hunt for the Britons, who were kidnapped in an audacious daylight raid by dozens of gunmen, police and residents said.

A senior Iraqi government official said Tuesday's kidnappings could be in retaliation for the killing of the militia's top commander by British-backed Iraqi special forces in the southern city of Basra last week.

Not only can kidnappings send a message and generate revenue, they can help to disrupt operations by 2GW forces, such as the U.S. and coalition troops in Iraq.

How long before we see this in Afghanistan on a large scale?

Sunday, May 27, 2007

Return on Disruption (ROD)

John Robb frequently comments on the very high "return on investment" achieved by global guerrillas when they "invest" their limited resources in systems disruption attacks. Being much lazier than Mr. Robb, I have decided to shorten the concept to "return on disruption" (ROD).

4GW groups/global guerrillas/insurgents - whatever you wish to label them - have the potential to achieve very high RODs using incredibly cheap tools. This is especially true in a society such as the one I am a part of here in the United States where fear-mongering by the federales, by state officials and by analysts of all stripes has led to a culture of panic-first-think-later. This is illustrated below:

Bobblehead doll sends 350 workers fleeing
from the AP
TUMWATER, Wash. - Talk about a blunder. A bomb technician discovered that a suspicious package that forced more than 300 workers to evacuate a state building contained a bobblehead doll awarded to public officials for perceived errors.

The package, sent by an intern at KOMO-TV in Seattle, was addressed to Department of Corrections Secretary Harold Clarke at the department’s headquarters in this town near Olympia.

Not to give the bad guys any ideas but this illustrates the fertile fields yet to be plowed by terrorists, gangs and individuals who have a grudge against the state. How much money was spent on this "operation?" What if the sender truly had ill-intentions? What if the "target" had been a facility that held critical infrastructure?

And the target infrastructure doesn't need to be governmental? What about buildings that house the operations for the processing of mutual fund or stock transactions? How about railroad depots? Bridges? Toll Roads?

Complex systems have a lot of weak points. Combine that with a society that has shifted to a blame-oriented, victim-centered, fear-driven culture and then add the spice of negative social mood and you have a firestorm of disruption waiting to happen. High RODs imply that groups will begin to invest in them, once they realize the potential for such huge returns.

Saturday, May 26, 2007

Friday, May 25, 2007

Polarization Continues...

Just another signal on the angry highway to Collapseville...

Debt Collectors Punch Mom In Face While 5 Year-Old Watches

From the "What Took Them So Long" Chapter of the Iraq War...

Not that this should be a big shock, considering the current socio-political environment in Iraq (ex-Green Zone), but we have yet another data point on ways the insurgents/dead-enders/AQ types fund their attacks.

Opium: Iraq's deadly new export
by Patrick Cockburn in Baghdad for The Independent

Farmers in southern Iraq have started to grow opium poppies in their fields for the first time, sparking fears that Iraq might become a serious drugs producer along the lines of Afghanistan.

Rice farmers along the Euphrates, to the west of the city of Diwaniya, south of Baghdad, have stopped cultivating rice, for which the area is famous, and are instead planting poppies, Iraqi sources familiar with the area have told The Independent.

The shift to opium cultivation is still in its early stages but there is little the Iraqi government can do about it because rival Shia militias and their surrogates in the security forces control Diwaniya and its neighbourhood. There have been bloody clashes between militiamen, police, Iraqi army and US forces in the city over the past two months.

Could we be looking at these various groups trying to emulate FARC and eventually carve out small narco-principalities? Or will they just focus on small gangs and contractors who use a variety of fields to generate revenue?

My guess is it will be the latter, since large operations are vulnerable to disruption (do unto them as they are doing unto the complex systems of the "state" of Iraq).

Another Combined 4GW/Socionomic Alarm


The kindling is being stacked in place to light the bonfire of serious disruptions all over the globe. Canada now joins the list. Here we have a tribal group engaging in systems disruption. This move towards confrontation and the fragmenting of social cohesion is classic socionomic theory at work.

Stop Trains or Natives Will: Chiefs
by CAMPBELL CLARK, Globe and Mail

GATINEAU — Canada's native chiefs will pressure the national railways to close down for the Assembly of First Nations' "day of action" on June 29, backing it up with a veiled threat they will probably face blockades from individual native bands if they refuse.

The carrot-and-stick approach was adopted nearly unanimously by chiefs at a special conference of the AFN, where chiefs who prefer more diplomatic political efforts were pushed to adopt tougher tactics by those who want to threaten economic disruptions to pressure the government.


Indian Affairs Minister Jim Prentice responded by arguing that it is wrong for the AFN to place companies in the middle of a dispute with the government, and repeated his warning that blockades will only hurt the public support for their cause.

Outspoken Manitoba Chief Terry Nelson of the Roseau River Anishinabe First Nation has already threatened to blockade a railway that runs through his community on June 29. It was his resolution, "acknowledging" the planned blockade and mandating the AFN's national executive to ask the railways to shut for the national day of action. Only one chief voted against it.


When mood finally rolls over, deep into the swamp of negativity and anger, this kind of mild action will be looked upon as a fond memory.

Wednesday, May 23, 2007

Delayed Posts

Just FYI, I'm tangled up in a huge project at work. Posting will be spotty for the next week or so. I do have some thoughts on systems vulnerability and the recent DNS attacks on Estonia by Russian-influenced state and non-state actors.

Enjoy these Spring days (Fall days to my friends in the Southern Hemisphere), keep your eyes open and your powder dry.

Monday, May 21, 2007

Even More Great Sites

When you get a chance, definitely link over to these sites for a variety of incisive analysis and deep thinking:

Pacific Empire - As they put it, their blog covers topics including politics, libertarianism, international relations, psychology, the philosophy of Ayn Rand, art and history.

And for those radicals among you, give a look-see at The Anthropik Network. I won't even try to categorize them. Combine them with Pacific Empire above and you will have an explosion of new food for the brain.

Sky on Fire

I don't know what effects, if any, this sort of thing will have down here on planet Earth, but between May 17th and this morning, May 21st, five gamma ray bursts have lit up the sky.

No word yet on their strengths or durations. That info will be forthcoming on:

GRB 070517A
GRB 070518A
GRB 070520A
GRB 070520B
GRB 070521A

Since I am in the camp of folks who think there is a strong solar and extra-solar component to climate change here on Earth, this might bear watching...

Dissecting Lies

Every now and then, I'll read something about nuclear power that is such a pile of lies that I just have to sit down and take it apart. This morning, I found one such article.

John Rosenthal has a blog at the Huffington Post. Messr. Rosenthal had this to say at the beginning of a blog post entitled "It's Still Dangerous Nuclear Power" (where did he learn his grammar, by the way?):

{UPDATE - Messr. Rosenthal or his editor apparently got out a good grammar text and changed the title of the post to "It's Still Nuclear Power" from the original title. Now, if only he'd taken as much care to do fact-checking...}

I thought the NRA's support for suspected terrorists continuing to be able to legally buy guns took the "truth is stranger than fiction" prize until I read some supposed environmentalists support reviving commercial nuclear plants as an alternative to carbon (vs. radioactive waste) producing fossil fuel facilities. Now if that isn't a shortsighted and false choice I don't know what is.

Well, Messr. Rosenthal goes on to prove he doesn't know much of anything when it comes to nuclear power. Let's break out the fact scalpel and go to work on this post, shall we? Below is his post in italics, with my comments and some of those things people like Messr. Rosenthal hate the most - facts.

The only factors that haven't changed in the last 20 years since the environmentally disastrous, inefficient and costly nuclear power plant expansion program was abandoned is that there's still no long term solution to nuclear waste storage and on 911 Al Qaeda terrorists flew past 12 operating nuclear plants proving that we're just as vulnerable to nuclear terrorist attack than we previously thought.

Ahhh, so glad you used the word "factor" there, Mr. Rosenthal. Let's talk about factors, capacity factors, for instance. Just released figures show nuclear power had a 90.13% capacity factor for 2004-2006. That means nuclear plants were up and running 90% of the time, providing reliable electricity at constant rates for millions of US citizens and businesses. Compare that to solar (20%-30% at best), wind (30% to maybe 35% for the best sites) and coal-fired power plants (75%-80%). Messr. Rosenthal calls nuclear inefficient. If nuclear power is inefficient, what does that make all the other sources of power out there?

He also uses the timeworn logical fallacy usually referred to as "waving the bloody shirt" - he tries to equate the atrocities of 9/11 with nuclear power plants. But in doing so, he destroys his own argument. He notes that the Al Qaeda terrorist flew over 12 nuclear power plants during their evil mission. Huh - that means that they obviously knew that nuclear power plants, with their massive concrete-and-steel containment domes would have withstood their assaults, and they went looking for something easier to destroy.

Oh yes, and the assessment of nuclear power security by the Department of Homeland Security? Only that "...nuclear plants are the best-protected assets of our critical infrastructure..." and it goes on to talk about how these-already well-secured assets are having security enhanced.

We'll leave the "waste storage" issue for a little later.

It's been sixty years since the highly secretive Manhattan Project developed nuclear power to create enriched uranium for the US nuclear weapons program. After we dropped atomic bombs on Hiroshima and Nagasaki Japan, President Eisenhower dreamed up the "Peaceful Atom" Program. In addition to making enriched uranium for bombs, nuclear power is just a fancy way to boil water in order to generate electricity. The nuclear fuel cycle theory goes; build Light Water Reactors fueled by enriched uranium and reprocess the highly radioactive plutonium waste by-product into fuel for the next generation of Breeder Reactors. These plutonium-fueled plants were thought to be the alchemists dream because the Breeder's by-product or waste is more plutonium, thereby making more fuel than it uses. Sounds great except reprocessing plants were shut down by President Reagan because they were too dangerous and didn't work, the only Breeder Reactor to ever operate was the Enrico Fermi Plant which was shut down when it began melting down nearly forcing the evacuation of Detroit Michigan, a millionth of a gram of plutonium causes cancer in laboratory animals, it explodes when it's comes in contact with air or water and 10 pounds is enough to make a large nuclear weapon. Throughout the entire nuclear fuel cycle from mining uranium to high level nuclear waste storage at every US nuclear plant, to decommissioning plants after 30 years of operation because they're too radioactive for workers to operate, large quantities of high and low level nuclear waste are generated with devastating environmental and public health consequences and no safe long term solution.

My goodness, where to begin with this stack of lies and misrepresentations?

First off, let's get soemthing straight. President Reagan didn't kill civilian recycling in the US, that was started by President Ford and Carter finished the killing of that vital program. Amazing how he wants to rewrite history. First, all major nuclear power countries recycle their used fuel except the US. Japan, Russia, France and the UK all recycle. They strip out the 90% of material that is still useful in a used fuel rod and treat the remaining 10% for storage - though work is ongoing on a way to "burn up" that remaining 10%. Recycling is expensive - yes - but it is technology that is over 60 years old. We know how to do it and do it safely. It is a political issue, not a technical one.

Messr. Rosenthal talks about plutonium in a very uneducated manner. Plutonium does not explode on contact with air. It can be machined and worked with. You don't want to inhale particles, true, but frankly, you could handle an ingot of pure plutonium-239 with gloves.

Plus, Messr. Rosenthal says that you only need 10 pounds of plutonium to "make a large nuclear weapon." That, folks, is a lie. A lie that contradicts the laws of physics as we know them today. Anyone who knows how to calculate a critical mass knows that Messr. Rosenthal is lying in an attempt to scare people into accepting his other lies.

He goes on to bemoan that used fuel rods are stored at power plants. Well, we are not allowed to recycle and we are not allowed to place them in long-term storage because Yucca Mountain has become a political football. So perhaps he could give us a third way?

The idea behind the Peaceful Atom was to convert the nuclear weapons program into commercial power plants. In 1957, because the US government's own studies reported that a Maximum Credible Accident at a commercial nuclear plant could result in over $7 billion in damage and render an area the size of Pennsylvania uninhabitable, the private utility industry refused to embrace nuclear power. As a result Congress enacted the Price Anderson Act which holds the nuclear industry harmless in case of a nuclear power plant accident. In fact you can find the small "Nuclear Exclusion Clause" at the bottom of any insurance policy you own or will ever buy. If nuclear power is so safe and clean why does the industry continue to require limits on liability? It's interesting that the only other industry that I know of that benefits from such a Congressional act protecting it from liability is the gun industry. Granted 30-40,000 Americans die every year from guns but that's a fraction of the number of Americans that could die from a large-scale nuclear accident or terrorist event with a conventional weapon (or plane) strategically placed. Remember on Sept. 11, 2001 the Al Qaeda terrorists flew past 12 operating nuclear power plants between Boston, New York and Washington DC. They could have easily turned 911 into a nuclear catastrophe. They didn't...this time.

Well, we somehow go from nuclear power to nuclear weapons and those 12 power plants that Al Qaeda flew by. Well, the worst-possible nuclear power plant accident has happened - it happened at Chernobyl. 56 people died. That kind of accident could not happen in the US as our power plants are vastly different, have massive containment structures around them (which Chernobyl did not) and are better engineered. Again, Messr. Rosenthal uses false logic, trying to equate nuclear weapons with nuclear power plants, which is ridiculous on the face of it.

By the way, please also notice the drama he adds: "Remember on Sept. 11, 2001 the Al Qaeda terrorists flew past 12 operating nuclear power plants between Boston, New York and Washington DC. They could have easily turned 911 into a nuclear catastrophe. They didn't...this time." Please allow me to drum up the dark music. AQ didn't attack nuclear installations because they, and anyone who can do the math behind the mechanics of materials knows that they would have failed to do anything except blow up their planes. Where did Mr. Rosenthal get his technical education?

To make matters even worse and in classic "do as I say not as I do" fashion, the US is the only country to have used nuclear weapons in war. Yet we insist that Iran not develop commercial nuclear technology for fear that they to will make, proliferate and maybe even use nuclear weapons. Still we boast that 17% percent of our exports last year were nuclear technology related. What is the US government thinking and where is the public outcry? What could be more destructive to the environment and civilization than a large-scale nuclear accident or terrorist attack with a conventional weapon (or airplane) at one of the 100 nuclear plants around the country? These plants are all located on water sources and many within close proximity of major cities that couldn't be evacuated in time, no matter how good a plan looks on paper. And at what risk? To avoid spending money on renewable energy, conservation and even cleaner coal while we transition from fossil fuels? Nuclear is the most dangerous alternative for boiling water and generating electricity and there are far better alternatives for energy production.

I will not even touch the first part of that paragraph. Perhaps Messr. Rosenthal, in addition to needing to learn the basics of physics and mathematics, needs to also learn history and gain appreciation for the complex issues involved in the attacks on Hiroshima and Nagasaki, and to learn more about current tensions in the Middle East.

As for the rest, what could be more destructive to the environment? How about climate change? How about no power to the millions of US citizens who rely on it for heating in the winter and cooling in the summer?

Nuclear power, far from being the most dangerous alternative, is the best, safest, cleanest and in the long-term, cheapest form of electricity that has been proven to date. Those are facts.

Messr. Rosenthal is a fact-challenged fool.

Sorry for the long post, but I had to get that out of my system.

Saturday, May 19, 2007

Peak Oil and..

Peak Oil and real estate prices? Peak Oil and geopolitical tensions? Peak Oil and transport prices? Peak Oil and government propaganda? Peak Oil and newsletter writers trying to get you to buy their product?



Peak Oil is a big issue for your life and portfolio. Take a few minutes over the weekend and be thinking of how $9/gallon gasoline or rationed gasoline would affect property values in your area. Think about how government would react. Think about food prices.

Friday, May 18, 2007

Socionomics and Real Estate

The Socionomics Institute has just issued a new podcast on the current problems with real estate in the U.S. from a socionomic point of view. Take a few minutes and give it a listen. Great stuff.

The Residential Real Estate Plunge is Just Beginning
How much will residential housing prices go down? 20%, 30%, and 50% are all possibilities. How are residential housing prices analogous to the ENRON scandal? We will tell you!

Unintended Consequences


Antonio Banderas and Salma Hayek in Once Upon a Time in Mexico.

Here's a question that's been churning around in my little brain for a few weeks.

If the Mexican federales are successful in their current efforts to crush one or more of the narcotraficante cartels, is this necessarily a good thing for the Mexican state?

What I wonder/worry about - if the organized cartels collapse, will they be replaced by numerous smaller, more vicious gangs that could spread violence and chaos at an enormous, Iraq-like rate?

The cartels would seem to have some vague interest in a stable, but corruptable state structure - it is better for business. If the best environment for smaller, vicious gangs (3rd Gen Gangs/Global Guerrillas/networked insurgents) to operate in is one in which the State has been hollowed out (by that, I mean where the state "exists" but has no real authority in many places, like Lebanon) and if it is cheap to "buy" the violence that hollows out a state through IEDs, bombing infrastructure, kidnappings (which are already rampant), etc. won't the destruction of the cartels spell huge problems down the road?

The Mexican State will soon be facing huge cash flow problems as their oil export income dries up in the face of declining production and rising domestic demand. At the same time, small gangs, who can best thrive when the police and federales are not very efficient or fearful of reprisal (Iraq's lessons, again) will want to ramp up violence to hold portions of the state hostage. In some cases we may see a Mexican version of MEND shaking down PEMEX. In others we might see contract gangs hired to do violent jobs, much as in Iraq.

What counterweights are there to this dire scenario? What social, economic or political forces can hold back this tide?

Thursday, May 17, 2007

Thoughts on Socionomics and Statistics

An initial reaction I had when I first read about socionomics was, "this sounds great in theory, but how would you ever develop a working model to predict just where aggregate 'social mood' was on a spectrum between manic-positive and gloomy-depressed?"

To review, socionomics, as I understand it, basically says that humans in large groups exhibit herding patterns, much like birds or large groups of bison, deer, etc. Yes, humans have the capability for reason, but this capability is a thin veneer over a much older and deeper portion of the brain that is the "default setting" for people. This herding behavior is shown by the need to buy similar houses, cars, fashion, etc. It helps govern which movies are popular and is a big driver for financial manias, be that mania in tech stocks or houses.

Social mood does help explain something I've puzzled about in the context of Fourth Generation Warfare. 4GW posits that small groups can leverage a system's complexity against itself through low-intensity conflict, bombings, sabotage, etc. Analyst John Robb calls these groups Global Guerrillas. Well, this vulnerability has been around since the dawn of industrialization. Power substations, pipelines, distribution networks have all been very vulnerable in the U.S. and Western Europe for decades. So why aren't we seeing Iraq-style conflict in those places (yet)? My suggestion is that social mood has been in an upswing for centuries in those places. This tendency towards harmony (not always - but in the main) has enabled these complex economic structures to be built up. Even after Nazi Germany was conquered - this type of insurgency did not develop. I suggest that socionomic mood played a big role there. What will happen to that infrastructure should mood ever turn down in a sustained way is another concern altogether.

As I have written elsewhere, the key insight to take away is that mood drives events. The "news" is just a way we humans rationalize these mass mood swings.

Fine, but how can it ever be anything more than a backwards-looking mirror to interpret the past? Yes, we can find patterns, but if we are never sure where we are on this pendulum of social mood, how can we know what actions to take to profit from this knowledge?

To date, the key indicators focused on by the founders of socionomics have been things like the price level of various financial and commodity markets, the types of movies that are popular, etc. With the rise of the internet and the development of web bots, another option becomes possible.

Research outfits like Half Past Human use web bots to scour the internet, parsing through the language used on blogs, forums, news stories, etc. and distilling them down to emotional values. From those values they then try to map out where the emotions seem to be taking events. That's a poor summary, but will have to do until a future date.

With the ability to gather data and quantify it (even if assigning values is a bit of an art), we have the foundation for statistical analysis. And hard science uses statistics to work with invisible "actors" all the time.

For instance, in my day job, I am a nuclear engineer. My friend is the neutron, who keeps the fission process going and who activates material used in nuclear medicine and industry. No one has ever seen a neutron. We have to use statistical models and measure the effects of this invisible entity on the visible world. Mood could be likened to this. No one has ever "seen" social mood. However, as we build up a database of language and events, we can begin to find trends and see how they match up to the Wave Principle and the socionomics hypothesis, allowing us to tweak the theories to match the facts.

We are looking for the bulk numbers. There will always be outliers that one can point to and say - look, that person never bought a tech stock back in the boom, so your hypothesis is wrong. Well, I can never tell you what an individual neutron is going to do - it could hit an U-235 atom and scatter, it hit another U-235 atom and cause fission, it could escape through the reflector and moderator and strike the aluminum support structure, etc. But give me twenty billion neutrons and I'll give you a working reactor and steady supply of medical isotopes.

I'm reaching here, I admit, but if socionomics is ever to be more than just a curiousity, this problem will need to be solved. I think it is solvable and I think statistics will be the key.

Now, I just need to get ahold of a huge bank of servers and some web bot programs...

Tuesday, May 15, 2007

Coming Soon...

Very busy for the next few days with the day job. Coming soon, though, a post on this nebulous thing called "social mood" and more ways we can try to quantify it and make it work for us as an analytical or even predictive tool. The engineer in me will not be satisfied with the socionomic hypothesis until I can boil it down to some more usable rule sets. That's the fun thing about it, though. Such a new field with a lot of exciting avenues of research.

Monday, May 14, 2007

Disintermediation

Disintermediation. It's a big word. If you are a real estate agent, learn it. I make no value judgment on this - just an observation. Change is coming and it is coming at just the worst possible time for real estate agents.

Chipping Away At Realtors' Six Percent
By Lesley Stahl, CBS

(CBS) Even with today's housing slump, real estate agents will pull in about $60 billion this year. And the reason is, as any homeowner knows, they charge a six percent commission on the price of every house they sell. So, for instance, a home that goes for a half a million dollars will net agents $30,000 right off the top.

For realtors, the six percent commission is sacrosanct. It's remained in place, even as the price of homes has quadrupled over the past 25 years.

But as correspondent Lesley Stahl reports, things are beginning to change. What happened to travel agents, stock brokers and book sellers – the encroachment of the Internet – is beginning to affect real estate agents. And the sacred six percent is under assault from online discounters.

New Nukes

China is proceeding with its plans to build a number of Westinghouse-designed AP1000 reactors. It makes me happy to see a new nuclear build of a passively safe Gen 3 design. It sickens me that those reactors are being build in China and not the U.S.

China Approves Largest Nuclear Power Plant

BEIJING--China's National Development and Reform Commission announced earlier this month that it has approved construction of China's largest nuclear power plant in its eastern Shandong Province, with a first phase investment of $3.25 billion in building two one-million-kilowatt nuclear generator units which will start operation in 2010.

I worked as an intern for Westinghouse back in 2005. Solid company with a lot of bright minds. Hopefully this will help spur some orders in the U.S.

Sunday, May 13, 2007

Remain Calm, All Is Well (Part Thirteen)

Been awhile since we last needed reassurance that fnord all is fnord well. Please pay no attention to the following topics. Go buy a fnord big flat screen TV and watch the pretty people of One Tree Hill or something. All is well. All is well...

Lending's next tsunami?
by MATHEW PADILLA, The Orange County Register
...IndyMac's sour loans and foreclosed real estate [have] ballooned 75percent to $324 million. "We are not going to fire-sell when we have the intent and ability and expertise to work through those loans and sell them ourselves," he said.

But Indymac and others who deal in Alt-A loans, such as Impac Mortgage Holdings of Irvine and Downey Financial of Newport Beach, may not have time to wait. The same problems shaking up the subprime market are now emerging in the Alt-A industry.

What's more, a Register analysis shows reserves for loan losses by these companies are not keeping pace with delinquent loans. Analysts say the same problem bedeviled New Century Financial of Irvine last year – and that helped send the once-top U.S. subprime lender into bankruptcy court after its financial backers lost faith in its accounting and liquidity.

Interesting that the author brings up New Century. Sounds like IndyMac is using their media scripts. Maybe they can keep it together. Let's hope so. If they don't hold it together, be watching for "squatters rights" movements to take hold soon. Property seizures, violence, collapsing property tax receipts - some patches of the country could see some or all of those events, if the socionomic hypothesis holds up.

And then of course, there is this from nuclear-armed Pakistan:


Pak troops told to shoot rioters in Karachi

And, as socionomics would predict, the immigration debate is ratcheting up another notch:


Texas city votes on illegals rental ban

At the same time, the equity markets have held up well. This is a key marker of sentiment and expected risk. Please use this calm before the storm to ready your financial house. Start building or strengthening ties in your neighborhood or town. Get ready, because if the wheels come off the credit bubble wagon soon, we will all be looking at a radically different world.

Saturday, May 12, 2007

More Great Sites

Added a couple of sites to the blogroll under 'Random and Useful.' These bloggers do top-notch commentary on the flux of events, violence and its relation to the power of the nationstate and a host of other fascinating topics. Well worth your time to check them out on a daily basis.

Coming Anarchy - I love their subtitle: Think Victorian, Speak Pagan. Their site is inspired by the estimable Robert Kaplan, who wrote a seminal article on the post-Cold War World by the same title. You will always find tasty intellectual treats to feast on there.

Soob - I'll let him give you his blog's mission in his own words: The content here within is designed to entail both offhanded meandering and intelligent insight. Where the boundary that divides the two lies is entirely at the discretion of the reader. I might add that Subadei succeeds.

A Helpful Guide

Too often I dwell on the potential downsides out there in this crazy universe. Well, here's something positive and proactive you can do.

Mr. George Ure has written an inexpensive guide on How to Live on $10,000 or Less. It costs $10 and will be money well-spent for you. The link above has a table of contents so you can preview it before you buy. Check it out and pick up a copy.

Pakistan Burning


This is quite possibly the most important story of the last few weeks. My friends, if nuclear-armed Pakistan descends into Iraq-style globalguerrilla conflict, we have ourselves a big, big problem.


Violence erupts over Pakistan's top judge, 15 dead
By Faisal Aziz

KARACHI (Reuters) - Fifteen people were killed in Karachi on Saturday in clashes between pro-government and opposition activists, the worst political violence in Pakistan in years, as the suspended top judge arrived to meet supporters.


The suspension of Chief Justice Iftikhar Chaudhry on March 9 has outraged the judiciary and the opposition and has blown up into the most serious challenge to President Pervez Musharraf's authority since he seized power in 1999.


Opposition leaders said Karachi was under siege by supporters of the pro-government Muttahida Qaumi Movement (MQM), which runs Pakistan's biggest city.

This may soon have to be raised to "Remain Calm, All Is Well" status...

Friday, May 11, 2007

These Guys Also Get It

Infrastructure attacks. Break the system - that's a key part of putting a nation-state into failure. Avoid attacking heavily-fortified positions or going toe-to-toe with well-armed soldiers (especially U.S. forces - we rule that kind of warfare).

Bombers kill 26 in attacks on 3 Iraqi bridges
By Ibon Villelabeitia and Dean Yates, Reuters
BAGHDAD (Reuters) - Truck bombs exploded on three important bridges near Baghdad on Friday, killing 26 people and damaging two of the spans in an apparent attempt by insurgents to paralyze road links to the Iraqi capital.

The attacks defy efforts by the U.S. military to smash car bomb cells and are the latest in a series of attacks on infrastructure around Baghdad, where U.S. and Iraqi forces have deployed thousands more troops under a three-month-old security plan. (more...)

Simmons' Energy Market Outlook

This is a large presentation, so don't link over if you are on a dial-up connection, but when you get a chance, do check out this presentation by Matt Simmons. For those versed in Peak Oil, there's not much new here, but for those wanting a solid overview with a lot of graphics, it is well worth your time.

Help Ron Paul

Support Ron Paul.



I won't call the guy a savior. The Welfare State Machine has grown too large. I will say he is the only candidate worth supporting in 2008.

Check him out and at least send the guy $10. He's telling it like it is.

Thursday, May 10, 2007

Localized Fuel Production

It's these kinds of biofuel options that I think will spring up around the globe, post-Peak Oil.

Coconut oil fuels the Pacific islands
by Nick Squires for the Telegraph
John Wolrath, an Australian who lives in the Solomon Islands, claims his small mill can produce up to 1,000 litres of coconut fuel a day, which he sells for about 35 pence a litre - a little less than diesel. "There were all these coconuts not being utilised, they were just going to rot under the tree," he said.

I'm not saying it will be cheap, pretty or easy. We will not see the "car culture" that I grew up with live more than another decade or so. I also believe these solutions will help inflame the eco-radicals that I expect to flourish in the Coming Chaos. That said, these are local solutions meeting local needs for transportation and generator use, even if to a limited degree. This kind of stuff will work in a world populated with globalguerrillas.

Wednesday, May 9, 2007

This Is A Sign

A sign of what, I am not sure, but in my opinion it is a sign that we are at a cusp, a turning point a major significance.

Richard Russell is a market analyst who has been publishing Dow Theory Letters continuously since 1958. DTL is ranked at the top for risk-adjusted performance (since 1980) by the Hulbert Financial Digest. He knows his stuff and has been very bearish for several years now.

Well, that has changed.
"We saw something that is extremely rare [on April 20 and April 25], in fact I can't remember ever having seen this before. What I'm referring to is that on those two dates all three Dow Jones Averages" (industrials, transports and utilities) "closed at simultaneous historic highs. To me, a fellow steeped in Dow Theory for over half a century, this was like a clap of thunder... My take on the situation is that the stock market (and the Dow Theory) told us that an unprecedented world boom lies ahead."

I hope to heaven he is correct. I fear that he has mistaken a massive liquidity flood for a healthy market. But then again, Mr. Russell has more market smarts and experience than I'm likely to ever have. It's either the bell ringing at the top of the rally, as a major bear turns bullish, or it is the starting gun for a huge runup in markets and hopefully civilization as well.

Tuesday, May 8, 2007

These Guys Don't Get It

As opposed to the folks down in Abiteye, Nigeria, these wannabes have no clue how to execute a 4GW offensive. Thank God these Al Qaeda types are drama queens and idiots, otherwise, we'd be facing serious problems.

Six arrested in plot to attack NJ army base
Reuters

WASHINGTON (Reuters) - Six New Jersey men have been arrested in what authorities said was a plot to kill soldiers at a U.S. Army installation in New Jersey, local media reported on Tuesday.

Investigators said the men planned to use automatic weapons to enter Fort Dix and kill as many soldiers as possible, according to the Newark Star-Ledger and television stations in Philadelphia and New York.

FBI agents arrested five of the men in Cherry Hill, New Jersey, and another elsewhere after members of the group allegedly attempted to buy automatic weapons, the Star-Ledger reported.

Monday, May 7, 2007

Interview With David Tice

David Tice manages the Prudent Bear Fund and gives a solid "fundamental" case for a coming bear market, as opposed to the wave analysis I usually refer to here.

Brett Arends interviews Mr. Tice for TheStreet.com, discussing the why's behind Mr. Tice's bearish stance.

In the interests of full disclosure, it must be noted that I hold a moderate stake (for me) in Prudent Bear shares. And yes, I pretty much agree with every word he says, especially here: "We think it's probably three to six months away from a significant decline." He calls the latest rally "a crack-up boom. At the tail end of credit excess it just gets crazier and crazier. It sucks people in, and it's an extremely dangerous scenario."

Preach on, brother Tice.

These Guys Get It

As a follow-up to A Pipeline Too Far? we have this story out of Nigeria:

Protest halts major Chevron oil plant in Nigeria
by Tom Ashby
LAGOS (Reuters) - Villagers with sticks and machetes staged a protest at a major U.S-operated oil production facility in Nigeria on Monday, forcing it to halt output as a precaution, authorities said.

It was the latest in a string of attacks on Western oil industry targets in the world's eighth largest exporter, which has curbed Nigerian output by a quarter and helped fuel a global oil price rally.

The protest at the gates of Chevron's Abiteye flow station in the western Niger Delta, which feeds the 160,000 barrel per day (bpd) Escravos export terminal, was triggered by alleged delays in compensation for an oil spill.

"There is a community protest. They are carrying sticks and machetes, but the place is full of government security forces who were drafted in over the weekend. The company has not lost control of the facility," a security source said.

Chevron said 42,000 bpd in oil output was hit by the protest. Talks have already begun and the company expects the crisis to be resolved quickly, said spokesman Femi Odumabo.

"Community leaders and elders are very supportive of Chevron and they are intervening. I think it will be brought to a close today or tomorrow," he said.

I bet community leaders are quite supportive of Chevron. They support Chevron paying them off at a higher rate and their little protest was a good reminder of how the weak can oppose the strong in a 4GW world.

As opposed to MEND, who may have gone overboard with their destruction of petroleum infrastructure, the folks at Abiteye have just used sticks and machetes to startle the Golden Goose into popping out a few more eggs, not kill it.

A Pipeline Too Far?

A recent post by John Robb highlights the delicate balancing act faced by nationstates and globalguerrillas.

The insurgents have learned that the best way to attack a nationstate is to attack its infrastructure. The laboratory of Iraq is showing similar experimental outcomes.

Shell Inches Back to Nigeria Oilfields
byTom Ashby, scotsman.com

LAGOS (Reuters) - Royal Dutch Shell is inching back to Nigerian oilfields shut for over a year by militant attacks, but restoring lost output will take several months and may be set back by more violence, industry sources said on Friday.

Shell pulled thousands of workers out of the western Niger Delta in February 2006 forcing a cut in oil production of 600,000 barrels per day (bpd), or one fifth of Nigeria's total capacity.

The attacks set a new low for violence in the Niger Delta, where a decades-long insurgency has increasingly hit oil exports, contributed to surging world oil prices and affected government finances.

The company is now sending workers back to abandoned control stations and pipeline connectors in the remote swamps around the Forcados export terminal, and [b]has discovered 700 km of pipeline stolen -- just one item on a repair bill thought to exceed $2 billion (1 billion pounds).

What are Shell's options here? What are Nigeria's?

Does Shell hire it's own mercenary army or try to pay one set of militias in the Delta to fight MEND? Can they do that and still make a profit?

I am not sure of Nigeria's military capabilities, but are those even relevant in this kind of conflict? Any way to work with tribal leaders to reach some sort of accord, much like is being done in Al Anbar at the moment?

And what about MEND? Are they going too far in hollowing out the state here? The idea would seem to be to strike balance between using violence to destabilize, but not too much violence so that the Golden Goose of oil gets shut down totally, wiping out access to oil bunkering and easy kidnap victims. If they push too hard and Shell never rebuilds, they have shot themselves in the foot.

This illustrates also how quickly complex infrastructure can revert to jungle in an atmosphere of violence.

Saturday, May 5, 2007

Potentially Cool Web-based Programming

Pardon me whilst the sci-fi geek in me comes out, but a new internet-only program called Sanctuary looks like it has potential.

I wonder why more programming like this hasn't come along? Or maybe it has and I've missed out on it...

Friday, May 4, 2007

Nuclear Power, 4GW and the Downturn In Social Mood

I come to my support for nuclear power from the angle of energy security. As we are rapidly approaching an era where fossil fuel supplies (notably natural gas and petroleum products) will not keep up with demand, especially with the growth in demand from China, India, et al, the fuel that keeps the wheel turning and the lights on for industrial economies is going to face volatile price movements, restrictions on supplies, outright nationalization and depletion.

Whether the peak in fossil fuel supplies is happening now, or happens ten years from now, is really irrelevant considering the long lead time needed to build up new sources of supply. In the case of liquid fuels, building up new sources of supply will be tough, as it will require major capital outlays in risky areas such as extreme deepwater, politically troubled regions or new technologies. New habits will be needed for those who rely on cheap fuel for personal transportation.

Electricity-based systems, such as eletrified rail and electric cars can provide a new path, though I doubt we'll ever see the kind of mass personal transporation that the U.S. saw from the 1930's through today. That era is over, the folks buying big houses in the exurbs just don't know it yet.

In my opinion, fringe sources for electricity such as solar, wind and tidal power can help provide for peak load power and should be encouraged, but for those that want to be able to provide a steady supply of power at prices that most everyone can afford - nuclear is the way to go. Yes, building up a new batch of nuclear plants will be expensive - but is it really all that more expensive compared to new LNG facilites or retrofitting refineries to handle the sour crudes from oil shales, sands and tars?

Nuclear "waste" is a political issue, not a technical one. We could start building a recycling plant tomorrow to handle the vast majority of the used fuel in the U.S. A used fuel rod contains vast amounts of potential energy even after several cycles in a reactor. The way we do it now in the U.S., it's like filling your car's gas tank up, driving around until the gas gauge reads 3/4 full, going to an auto mechanic, having him remove the entire gas tank - with the gasoline still in it, welding on a new, empty tank and then finding a place to dispose of the 3/4 gas tank. Idiotic. As for the portions of the used fuel that we don't want to put back into new fuel, we can build a fast reactor to burn the actinides up - 100% mass burnup of the waste forms. Solar can't even beat that - the waste from silicon processing is nasty in the extreme and leaves behind a legacy of chemical waste for future generations.

Fine, you say. Nuclear looks good on paper (or you may still disagree, which is fine as well - just don't come bitching to me when the cities begin to go dark and your iPod or laptop gets fried by dirty power) - but you may also point out that here at FutureJacked, I have discussed what I regard as a coming shift in social attitudes and that this new cycle of negative mood, coupled with the empowering technology of the microchip could lead to small groups being able to damage the continent-wide electricity supply grid that blankets North America. If the grid is so vulnerable, then why build big new plants?

Here I take a few themes from John Robb's "Brave New War" (which I reviewed here) and use (or misuse it) for my own purposes. Mr. Robb points out that in a world where small groups can leverage tremendous violence for enormous "returns on investment" for their acts, large complex systems are going to be very vulnerable in the coming decades. To insulate our communities, we must be able to build up resilient systems.

My take boils down to the development of a web of "nodes" that provide electricity for a region. We could focus on providing robust power sources for cities or even states. These grids would actually be platforms, where all users are encouraged to be both producers (solar, wind, whatever) and contribute to the grid (this would require more capital outlays for the interface, but resilience won't be cheap) as well as draw from it. There would be a keystone player, in this case nuclear or coal. We'd have to look into building either redundant power lines or getting extreme and putting small nuclear plants in hardened facilities inside cities.

Yes, I said it. But think for a second - if you could put ten small nuclear reactors of the 4S design spread throughout a city - with the various transmission lines buried and hardened, you make it much more difficult for globalguerrillas to target your infrastructure. Right now, as Mr. Robb pointed out in his book, in Iraq, all insurgents have to do to gauge electricity use is to count the number of smokestacks that are operational at a plant to know which unit is up and running. With nuclear plants that use water as a coolant, your cooling tower steam could be a marker, but if you are built inside a city, you can use the process steam for heating or industrial uses.

Nuclear has another strong advantage and that is the fuel cycle. You don't have long lines of coal cars pulling up to your power station, disgorging tons of fuel every week or so. With nuclear, it is once every 18 or 24 months. The small, battery-type reactors recently developed have projected fuel cycles on the order of decades. A big advantage in a world where infrastructure is going to be very vulnerable to disruption.

As to the worries about accidents, well, we can design you a hardened site, underground and do our best to mitigate the threat from missiles or planes. At the end of the day, though, you must balance your risks. Do you want to take the 1 in a billion chance of a nuclear accident or do you want a steady supply of power for your people and your civilization?

If our coming era of violence gets terribly extreme, you can wall off your city, whittle down the insurgents to a manageable level and get medieval for awhile. Until the cycle turns back up.

Nuclear has many advantages in an era of expensive energy and fractured infrastructure. It's time will come, it just depends on how much pain we want to go through to get there.

Again, what markers to watch to look for this downturn in mood I expect, that will possibly provide the drive to move towards dispersed, small-scale nuclear?
  • DJIA under 9,000
  • Mortgage Loan "Crisis" extends to prime borrowers
  • Federal Budget Crisis
  • Major negative military event in Iraq
  • Riots in L.A., Detroit, Houston and/or Atlanta

Thursday, May 3, 2007

For Elliott Wave Geeks

The Fibonacci Sequence plays a role in the timing and shape of Elliott Waves, which is the foundation of socionomics. For the hardcore among you, I strongly suggest building up a Fibonacci library that includes an historical overview as well as real-world analysis.

For those wonks out there that take their analysis with a physics chaser, Here's a recent article of interest:

Scientists find clues to the formation of Fibonacci spirals in nature
By Lisa Zyga
Chaorong Li, of the Zhejiang Sci-Tech University and the Institute of Physics in Beijing, along with Ailing Ji and Zexian Cao, both of the Chinese Academy of Sciences, produced their Fibonacci spiral pattern by manipulating the stress on inorganic microstructures made of a silver core and a silicon dioxide shell. The spontaneous assembly of Fibonacci patterns has rarely been realized in the laboratory, and the scientists’ results suggest that plant patterns might be modeled by mutually repulsive entities for both spherical and conical surfaces.

"Patterns that evolve naturally are generally an optimized configuration for an assembly of elements under an interaction,” Cao explained to PhysOrg.com. “We conjecture that the Fibonacci spirals are the configuration of least elastic energy. Our experimental results provide a vivid demonstration of this energy principle. This is the best support for this energy principle of phyllotaxis (or “leaf arrangement,” often credited to D'Arcy Thompson) before a rigorous mathematical proof is available.”

Enjoy.

Wednesday, May 2, 2007

Another Turn of the Screw...

Our Russian friends have unsheathed the energy sword again, this time against Estonia.

Russia halts oil products to Estonia amid dispute
by Dmitry Zhdannikov, Reuters

MOSCOW (Reuters) - Russian oil firms rushed on Wednesday to re-route a quarter of their refined products exports away from ports in Estonia after Russia's railways halted the route amid a political dispute with Tallinn.

Oil traders said the state railway monopoly was not accepting volumes slated for May shipment and they were looking now at Russian Baltic Sea ports and Ukraine's Black Sea outlets as alternative destinations.

Russian coal exporters also said May exports of Russian steam coal via Estonia had been effectively halted due to a shortage of rail wagons after the rail monopoly RzHD told them they must use their own rail wagons, not RzHD's, but it had not been possible with such short notice to find alternative wagons. (more...)

What is it going to take to make Europe realize that security of supply is a critical issue here in an era where fossil fuel depletion is beginning to make itself felt in the form of volatile prices lack of friendly suppliers? How many will freeze to death or die of heat stroke due to energy shortages before they realize that increasing the nuclear component of the energy supply budget can cushion the coming blows?

You might ask how nuclear power will play in an era of 4GW, angry social mood and constrained credit and capital? I'll work on that in an upcoming post.

Third Socionomic Podcast

And Part 3 of 3 of the interview on socionomics and individual behavior:

An Individual Perspective on Socionomics - Part 3 of 3
Dan Gough and Alan Hall conclude their discussion on socionomics and the individual. They cover politics, markets, foreign policy, baby boomers, personal behavior, civil rights, and the 60's drug and sexual revolution.

Tuesday, May 1, 2007

Socionomics Podcasts

Here are some interviews that give a hands-on perspective of how individuals can use socionomics for fun and profit. They speak to a theme dear to my heart - finding "meters" to measure social mood besides the equity markets.

Enjoy.

An Individual Perspective on Socionomics - Part 1 of 3
In this three part series Dan Gough and Alan Hall discuss how adopting a socionomic perspective changes the way an individual looks at the world and how those changes can be beneficial both personally and financially.

An Individual Perspective on Socionomics - Part 2 of 3
Dan Gough and Alan Hall continue their discussion on socionomics and the individual. How to position yourself for maximum benefit, how to understand social events more clearly, recognizing wave patterns in life, and herding are all examined.